Daily Economic Commentary: United States

Trading Discussion News and Economy
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Without any economic data on tap, the dollar crashed and burned on the charts on Friday. EUR/USD ended the day 114 pips higher at 1.3897, while USD/JPY closed 70 pips below its opening price at 76.14.

What the heck happened?!

Well, it looks like risk appetite kicked into overdrive on optimism that European leaders were getting closer to coming up with a solution to the debt crisis. However, I think it’s worthwhile to know that policymakers didn’t present any concrete plan during their meeting.

Of course, it also didn’t help the dollar that Federal Reserve Governor Daniel Tarullo remarked that the Fed should further ease monetary policy by buying more mortgage bonds to boost the housing market. Boo!

Our forex calendar is still blank for reports from the U.S. today. And so, it would be a good idea to keep tabs on market sentiment. The EU Summit still isn’t over and investors are looking forward to Wednesday when European leaders meet again. So be on your toes for updates!

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When traders are hungry for risk, then you know that the dollar bears are making their pips! No thanks to prolonged risk appetite in markets, the dollar continued to post losses against its major counterparts. EUR/USD climbed by another 83 pips to 1.3926, while USD/JPY ended the day just a few pips shy of the 76.00 handle.

The economic board was empty in the U.S. yesterday, but traders were busy trading the choppy risk sentiment in the markets. Optimism on the euro zone debt crisis won out again, but the dollar bears got help from more speculation that the Fed will implement a QE3 sooner than expected.

Will news on the euro region continue to dominate the Greenback’s price action? At 1:00 pm GMT today we’ll see the S&P house price index, which will be followed by the CB consumer confidence and Richmond manufacturing index out at 2:00 pm GMT. Overall the reports are expected to come in a bit better than their previous figures, but any downside surprise in those data could send the dollar even lower in the charts.

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“I get knocked down but I get up again,” sang the Greenback yesterday when it had a Tub Thumping day in the charts. The U.S. dollar gained against most of its major counterparts, except for the Japanese yen and the British pound. USD/JPY tried to hold on to the 76.00 handle as it closed just 4 pips below it, while GBP/USD squeezed out a small gain and ended 4 pips above its 1.5900 open price.

Disappointing news from the euro zone, combined with weak economic figures from the U.S., prevented traders from pursuing higher-yielding currencies yesterday. Last I heard, the EU Finance Ministers Summit which has been moved to today got postponed yet again! Will they ever make up their minds? And what’s taking them so long?

It didn’t help that data from the U.S. all came in the red. For starters, the S&P housing price index printed a 3.8% decline, which was larger than the projected 3.6% drop. The Richmond manufacturing index also turned out to be a disappointment as it stayed at -6 instead of rising to -2 as expected. Even worse, the CB consumer confidence index showed a dismal drop from 46.4 to 39.8, implying that consumers grew much more pessimistic about their country’s economic prospects. Yikes!

Today, the U.S. is set to report its durable goods orders data at 1:30 pm GMT. After sliding by 0.1% in August, the headline figure could show an even steeper decline of 0.7%. Meanwhile, the core figure is expected to post a 0.5% rebound for September. Also due today is the new home sales report which could come in at 302K, which would be an improvement over the previous month’s reading of 295K. Keep an eye out for that report due 3:00 pm GMT because another round of poor data could boost the safe-haven Greenback!

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The hopeful dollar bulls got whipsawed big time yesterday. The dollar gave out a strong performance late in the European trading session but its gains proved unsustainable. EUR/USD, for instance, went as low as 1.3800 and then popped back up to 1.3900. EUR/USD is currently trading at 1.3980, its highest level in almost two months.

The choppy price action of the dollar was due to the barrage of news that came out of the EU summit. First, the dollar was bought up furiously because the Greek haircuts that didn’t fulfill the market’s expectation. Then, the dollar was sold-off as good news about the EFSF and bank recapitalization came out.

Economic data from the U.S., on the other hand, were all positive. The core durable goods orders showed a 1.7% rise, more than three times the expected increase. In addition, the report on new home sales surged to 313,000, higher than the 302,000 forecast and last month’s 296,000.

Today will be another big day for the dollar as the U.S. advance GDP report will come out. Scheduled to publish at 12:30 pm GMT, the advance GDP is expected to show that the economy expanded 2.4% during the third quarter.

At the same time, the weekly initial jobless claims will be released to the public. The market is expecting a 400,000 figure, slightly lower than last week’s 403,000.

Finally, at 2:00 pm GMT, the pending home sales report will print. The consensus for this report is a 0.2% gain, opposite the 1.2% decrease from last month.

Let’s see whether the positive expectations on the upcoming reports will trigger risk appetite and cause a dollar sell-off again.

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The U.S. dollar lost ground to its major counterparts as risk appetite popped its head back in the markets yesterday. USD/JPY dipped to a new low of 75.66 while EUR/USD soared past the 1.4000 handle to a high of 1.4248. Will the Greenback take another beating from the higher-yielding currencies today?

Strong economic data from the U.S., combined with significant progress on the euro zone debt talks, ushered in a strong wave of risk appetite yesterday. Traders were relieved to hear that the euro zone officials reached an agreement on the debt deal, which involved bank recapitalization and EFSF leveraging. For more details on the euro zone debt deal, head on over to my euro zone economic commentary!

Meanwhile, the U.S. advanced GDP figure came in slightly better than expected at 2.5% for the third quarter of the year. This marked a considerable improvement from the 1.3% economic expansion seen during the second quarter. Components of the GDP report showed that the stronger pace of growth was led by consumer spending and business investment.

Aside from that, the jobless claims data showed that first-time claimants dropped from 404K the other week to 402K last week. However, the pending home sales report turned out to be a disappointment as it logged in a 4.6% drop instead of posting the expected 0.2% uptick.

For today, watch out for the release of the core PCE price index, which is rumored to be the Fed’s preferred measure of inflation. The index is expected to show another 0.1% uptick for September. Also due today is the employment cost index for the third quarter, which is set for release at 1:30 pm GMT. This could print a 0.6% increase for the period, slightly less than the 0.7% rise seen the previous quarter.

Last but not least is the revised University of Michigan consumer sentiment figure due 2:55 pm GMT. The reading is expected to climb from 57.5 to 58.1 in October, reflecting an improvement in consumer confidence.

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Aha! Looking at Friday’s price action, it seems like traders hit the club early. Most dollar pairs merely consolidated after a very volatile week. For instance, EUR/USD traded within a 40-pip range, ending the day 28 pips below its opening price at 1.4158.

Aside from the lack of any market-moving updates from Europe, we also only had a couple of second-tier reports from the U.S. on Friday. The Core PCE index, said to be Fed’s preferred measure of inflation, printed flat for September and disappointed the 0.1% forecast. Meanwhile, the revised University of Michigan Consumer Sentiment index topped the 58.1 consensus when it came in at 60.9 for October.

But don’t worry! I bet Dr. Pipslow’s iPhone 4 S that we’ll also see a lot of action from the dollar pairs this week given the roster of reports we have lined up.

We kick-start the week with the Chicago PMI for October which is due later at 1:45 pm GMT. It is anticipated to print at 59.2.

Tomorrow we’ll have the ISM manufacturing PMI at 2:00 pm GMT, eyed at 52.3. Then on Wednesday, we’ll get dibs on the ADP report and FOMC Statement. Finally, on the first Friday of November, the NFP report for October will be released and it is anticipated to print at 98,000.

So be sure you don’t miss them, ayt?

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What a way to end the month! Everything went the dollar’s way yesterday as it strengthened against all of its major counterparts. Not only did it get a boost from the BOJ’s intervention, but it also strengthened on weaker risk appetite. At the end of the day, USD/JPY finished 253 pips higher while EUR/USD fell 285 pips.

First off, the dollar received a big boost from the Bank of Japan’s decision to step in yesterday. After all, it was one of the largest interventions in recent history, estimated at a size of 130 billion USD. Who do you think stands at the receiving end of this huge flow of dough? That’s right, the dollar!

Aside from that, it seems like risk appetite has begun to level off now that the hype surrounding Europe’s rescue package has died down. Now, investors seem to be focusing their attention on the shortcomings of the plan and how it has failed to address investor confidence and rising bond yields in non-bailed-out countries. With that in mind, they’ve been less gung-ho about taking on risky investments and have been turning back to safe haven assets such as the dollar.

Today, there’s a good chance that the dollar will extend its gains if the ISM manufacturing PMI prints positive results. Forecasts have the index rising slightly from 51.6 to 52.1. This has been a major market mover in the past, so be sure to catch the report when it comes out at 2:00 pm GMT!

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The dollar showed no mercy on the charts as it followed up its awesome rally on Monday with another vicious performance. Once gain, it proved to the markets that it was the top dog as it pushed USD/JPY up another 21 pips and dragged EUR/USD down another 155 pips. With big events on tap today, will the dollar extend its rally?

The story yesterday was pretty simple. Risk aversion struck the markets, and the dollar soared. New drama in the euro zone (read my commentary on the euro for a more in-depth discussion) had traders scrambling to buy up the safe haven dollar again. But will they have the same mindset today?

Who knows! But if the ADP non-farm employment report shows upbeat data, it’s likely that the dollar-buying could continue. Forecasts have the report showing an increase of 102,000 in jobs following the 91,000 uptick in September. Don’t miss this report when it comes out at 12:15 pm GMT!

After that, we’ll deal with the FOMC statement. Those with weak hearts, beware! We could be in for some explosive moves at 4:30 pm GMT!

We’ll have to listen closely to what the Fed has to say. If it sounds more optimistic about the economy and doesn’t make any changes to its policy, the markets could take it as a positive sign and buy up the dollar.

On the other hand, many believe that the Fed will ease its monetary policy further. Interest rates are already about as low as they can get, so the most reasonable form of easing for the central bank would be to increase its asset purchase program. If that does happen, we could see dollar weakness. However, considering that the markets are still operating in a risk-off environment, the dollar may not have much room to fall.

In any case, look for the Fed to make critical announcements regarding inflation targets, growth forecasts, and the outlook for interest rates as they will be key in trading the dollar. Good luck, fellas!

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After two days of impressive gains, dollar bulls took a break yesterday, allowing some of the higher yielding currencies to push ahead. EUR/USD recuperated some of its recent losses, as it finished 44 pips higher at 1.3747. Meanwhile, GBP/USD didn’t make headway in either direction, as it closed at its opening price of 1.5949.

ADP job figures were a little encouraging, coming at 110,000, which was slightly higher than the projected 102,000 figure. This marked the 10[SUP]th[/SUP] consecutive month that the ADP has printed positive job growth. Now normally, this would be a good indication that the labor market is improving. However, in recent months, the ADP report hasn’t been that good of a leading indicator of the NFP report. This is why the ADP has resulted in some rather quieter moves in the market lately.

As for the FOMC meeting, we got some mixed results, as the Fed didn’t reveal their plans too much. On one hand, Ben Bernanke had a slightly optimistic tone, as he pointed to improving economic data during the third quarter. On the other hand though, the Fed also downgraded growth forecasts. The central bank now predicts growth of 1.6% to 1.7% for 2011, down from 2.7% to 2.9%, while for 2012, forecasts got revised from 3.3% - 3.7% down to 2.5% - 2.9%.

In any case, this just goes to show that the Fed is keeping mum and buying more time to decide before injecting more stimulus into the economy.

For today, we’ve got a slew of red flags going up the economic totem pole, so make sure all you playas get your Rolexes fined tuned so you don’t miss out!

First up, at 12:30 pm GMT, we’ve got weekly jobless claims and quarterly nonfarm productivity figures on tap. Once again, jobless claims are expected to come in at just over the key 400,000 mark, this time printing at 401,000. Meanwhile, nonfarm productivity is seen to have increased by 2.6% last quarter, which would be a solid improvement from last month’s upwardly revised 0.7% decline.

Later on at 2:00 pm GMT, the ISM non-manufacturing PMI report is scheduled for release. The index is forecasted to print a score of 53.7, which would mark a slight improvement from last month’s reading of 53.0.

If these figures come in better-than-expected (below 400,000, higher than 2.6% and 53.7), it would indicate improving economic conditions, which could boost some risk taking in the markets.

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That was quite a turnaround, wasn’t it? Just the other day, the Greenback was strutting its stuff across the charts… then BAM! Risk appetite came rushing back in! Because of that, the Greenback gave back most of its gains against its counterparts, except for the Japanese yen and Swiss franc.

It seemed that economic reports were placed on the back burner yesterday as market participants focused on the goings-on in the euro zone. Rumors that Greek Prime Minister Papandreou was going to step down led many to hope that the Greek referendum would be canceled, which would mean that the country would receive the next tranche of aid with no further delays. Although PM didn’t actually step down, Greece abandoned its plan for a referendum just the same and left Papandreou’s fate up to a vote today.

On the U.S. economic front, data has been mixed as first-time jobless claims turned out better than expected while the rest of the labor market data fell short of consensus. Weekly unemployment claims fell below the 400K mark and landed at 397K, slightly better than the predicted 401K. However, non-farm productivity for the third quarter came in at 3.1%, higher than the expected 2.6% figure. This could have negative effects on consumer spending and inflation down the road since rising productivity means that laborers are working harder without any increase in compensation. This was confirmed by the steeper than expected drop in unit labor costs for the third quarter as the report showed a 2.4% decline.

The never-ending Greek debt drama may be hogging the spotlight lately but don’t forget that today is NFP Friday! After churning out a better than expected 103K reading for September, the jobs report is predicted to show a 97K figure for October. Another stronger than expected result could keep traders risk-hungry, which could be bearish for the safe-haven U.S. dollar. Brace yourselves for extra volatility as well!

Make sure you keep an eye out for any updates on the G20 summit as well. Last I heard, the finance ministers wanted to talk about China and its exchange rate policies. Aside from that, they’re also set to debate about the IMF’s Special Drawing Rights, which could serve as a credit line for member countries. Positive developments could extend risk appetite’s stay in the markets today.

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Instead of the bloodbath that most of the permabears were expecting, the NFP Friday actually helped the dollar gained against its major counterparts. The positive NFP report boosted USD/JPY by 18 pips to 78.24, while EUR/USD slipped by 31 pips to 1.3792.

With almost all the U.S. economic reports printing to the upside, who could blame the currency bulls from getting a piece of the Greenback? Not only did the NFP report clock in a 80,000 gain in October, August and September’s readings were also revised upwards to show a total of 102,000 added jobs. Oh, and believe it or not, the unemployment rate also went down to 9.0%! I don’t know about you, but I think I heard the Fed breathe a sigh of relief!

Even the other not-so-major reports joined the good vibes party. Last Friday we also saw the average hourly earnings inch higher by 0.2%, while the manufacturing sector added a healthy 5,000 figure for the month of October.

Today only the consumer credit report for September is scheduled for release at 8:00 pm GMT, but make sure you stay glued to the tube for other news reports that might affect risk sentiment! I’m betting my neighbor’s cat that the markets are still looking for some action from the drama in the euro zone, so make sure you stick around to hear any of the reports!

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Without any economic data on tap, the dollar’s scorecard was as mixed as Lady Gaga’s wardrobe in yesterday’s trading. It was able to snatch 9 pips from the euro when EUR/USD closed at 1.3781 but lost 13 pips to the yen when USD/JPY ended the day at 78.06.

Looking at our forex calendar, it seems like we don’t have a lot of top tier data coming out of the U.S. this week. Later today we only have the IBD/TIPP Economic Optimism index for November. To be released at 3:00 pm GMT, the index is anticipated to print higher at 42.5 than October’s 40.3 reading, hinting that the outlook of consumers somehow improved during the month.

With that said, it might be better to keep tabs on market sentiment. Pay close attention to Europe, ayt? I have a strong feeling that a major reason for the consolidation among currency pairs yesterday was because traders were still trying to get a feel of the events unfolding in the euro zone, with political instability hitting Greece and Italy. So watch out!

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Remember what I said about watching market sentiment yesterday? Well, I sure hope you listened! The dollar was wiped out by a wave of risk taking as the safe haven currency ended weaker across the boards. At the end of the day, it found itself at the bottom of the food chain, losing out against all of its major counterparts. Yeeouch!

With risk appetite on the upswing, the safe haven dollar had no chance on the charts. It didn’t help that the U.S. published no reports to support its currency.

The only news to come out of the U.S. was a couple of speeches from FOMC voting members. Philadelphia Fed President Plosser said that he believes the economy has no need for more stimulus and that the Fed should focus on an inflation target (2%) rather than a jobs target.

Hmm… No need for stimulus? I don’t know about that! Bear in mind that Plosser is actually one of the most hawkish members of the FOMC. As a matter of fact, he has consistently voted against the Fed’s recent easing. So keep in mind that his statements are on the hawkish side of the spectrum and aren’t necessarily representative of the views of other FOMC members, okay?

Minneapolis Fed President Kocherlakota, on the other hand, believes the Fed should focus on transparency and have backup plans in place. He says the Fed should consider other ways to lower interest rates, such as extending interest rate pledges and bumping up securities purchases.

Today, it looks like we’ll have to check in on market sentiment some more because the U.S. won’t be publishing any big reports again. However, if you’re interested in learning more about what’s on the Fed’s mind, you may want to listen in on what Fed Chairman Bernanke has to say at 2:30 pm GMT. Good luck, fellas!

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Halloween may already be over, but it looks like the markets aren’t done trick-or-treating just yet! Yesterday, concerns from all over the world spooked investors and forced them to flee to the safety of the dollar and the yen.

Not surprisingly, the dollar gained all of its higher-yielding counterparts. EUR/USD closed 282 pips below its opening price at 1.3555, GBP/USD was down 177 pips at 1.5927, and AUD/USD ended the day 245 pips from where it opened at 1.0154.

There were a few haunting stories that circled around the FX town and scared traders out of “risky” assets. One, Italian bond yields have risen above 7%. According to Forex Gump, that is the level which forced Greece, Ireland, and Portugal to ask for bailouts. Consequently, rumors of an Italian default started to go around.

On top of that, weaker-than-expected data from China raised concerns about slowing global economic growth. Retail sales for October fell short of market expectations by 0.3% when it printed at 17.2%. The industrial production report also disappointed the 13.3% forecast when it came in at 13.2%.

But it wasn’t all that bad. Fixed asset investment in October rose by 24.9% and beat estimates for a 24.7% uptick in spending on capital investments. The PPI for the same month must have also allowed investors to breathe a sigh of relief when it only posted a 5.0% increase, lower than the 5.7% surge that analysts had predicted, as it means that the central bank has one more reason not to tighten monetary policy (which oftentimes takes a toll on growth). However, the CPI for the same month clocked in higher at 5.5% than the 5.4% reading that analysts were eyeing.

The trade balance and unemployment claims reports from the U.S., which are due to be released today, will probably affect market sentiment too. So make sure you don’t miss them! At 1:30 pm GMT, analysts are anticipating to see a wider trade deficit of 46.1 billion USD for September than the 45.6 billion USD deficit we saw the month prior. Meanwhile, the unemployment claims report is eyed at 401,000.

Given the market’s risk averse sentiment, there’s a good chance for us to see the dollar rally when the reports come in worse than expected as these would only fuel concerns about the global economy. That’s just my two cents though. Be sure to keep tabs on market sentiment, ayt? Peace!

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The Greenback found itself on the back foot of other major currencies as risk aversion tempered. Apparently, thanks to a solid Italian bond auction, market mood was uplifted, which helped higher-yielding currencies gain ground versus the Greenback. EUR/USD, for instanced, managed to post a 53-pip gain yesterday.

In addition to the successful bond auction, the market sentiment also got a boost from the S&P. The S&P announced yesterday that France’s credit rating remains at triple A with a stable outlook.

U.S. data were also slightly better than expected. The trade balance came in with a 43.1 billion USD deficit, lower than the 46.1 billion USD deficit initially predicted. Meanwhile, the U.S. jobless claims finally fellow the 400,000 mark as it printed a 390,000 figure.

Today, the only red flag on the U.S. economic calendar is the preliminary University of Michigan consumer sentiment survey. It is slated to show a reading of 61.3, which is an improvement fromm the previous month’s 60.9 (revised up from 57.5). The actual result will be released at 2:55 pm GMT.

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Rough day for the dollar last Friday night, as risk appetite helped higher yielding currencies run all over the Greenback. EUR/USD and GBP/USD both rose 151 pips to close at 1.3754 and 1.6079 respectively, while the comdolls all posted significant gains as well.

The major catalyst that drove the market into risk-taking mode was due to development in the European political arena. All of a sudden, both Greek PM George Papandreou and Italian PM Silvio Berlusconi are out of office, and this has helped ease the markets back into risk-on mode.

U.S. data also helped, as the preliminary University of Michigan consumer sentiment report printed better-than-expected, coming in at 64.2. This was higher than the projected 61.3, and also a nice improvement from the previous month’s reading of 60.9. Consumer sentiment is a good leading indicator of spending, so if this continues, it would be a good sign for the economy.

If you’re the type who loves trading during the New York session, be prepared as this looks like it could be one helluva week!

Tomorrow, we’ve got retail sales, the producer price index, the Empire State manufacturing index and business inventories levels on deck.

On Wednesday, more inflation data will be available in the form of the CPI report, while TIC long-term purchases and industrial production figures are also scheduled for release.

Then on Thursday, we’ve got housing market data on tap as building permits, housing starts, and mortgage delinquencies data will be available. In addition, the weekly unemployment claims and Philly Fed Index will also be released.

It looks like we’re in for an action packed week, so it might be best to lock-up those copies of Skyrim and Modern Warfare 3, cause you’re gonna need to concentrate and focus if you wanna make some pips this week!

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And just like that the Greenback managed to recover all of its losses from Friday. Wow, talk about a major comeback! Due to the ongoing uncertainty surrounding the euro zone debt crisis and political issues, traders sought the safety of the Greenback yesterday. EUR/USD, which began the day at 1.3789, found itself 164 pips lower by the end of the U.S. trading session. Meanwhile, GBP/USD dropped to 1.5903 from 1.6087.

Today, we’ve got a couple of major economic releases that you need to watch out for. At 1:30 pm GMT, the U.S. will release the retail sales report, the producer price index, and the Empire State manufacturing index.

The retail sales report is expected to show a 0.3%, which is much lower than the 1.1% seen the previous month. Meanwhile, the core version of the retail sales report is slated to show a 0.2% gain, a third of the 0.6% increase experienced last month.

The produce price index shares the same disappointing forecast. It is predicted to print a 0.1% decline, opposite the 0.8% gain last month. Thankfully, the Empire State manufacturing index has a positive forecast. The reading is expected to improve to -2.0 from -8.5.

With risk sentiment driving price action, the disappointing market forecasts could actually end up being beneficial for the Greenback. Let’s see how traders react to the news today.

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Back-to-back, baby! Aside from better-than-expected economic reports coming out from the U.S., concerns on the euro zone economy steered investors to the arms of the low-yielding Greenback. EUR/USD finished the day 96 pips lower than its open price, while USD/CHF soared by 81 pips to .9155.

The U.S. PPI report might have clocked in a 0.3% decline in October, but the country’s retail sales report exceeded expectations with a 0.5% growth in the same month. Heck, even its core figures showed a better-than-expected figure at 0.6% when market geeks were only expecting 0.2%. Last but not the least, the Empire State manufacturing index printed an index reading of 0.6 in November, which is a lot higher than October’s -8.5 reading.

Of course, it also didn’t hurt the dollar’s reputation that risk aversion plays were back in the game yesterday. As I said in my euro write-up, bond yields in the euro zone rose to its highest levels since the euro era began, which hinted just how wary the investors are at the current leaders’ abilities to stem the region’s debt crisis.

At 1:30 pm GMT today we’ll be getting our hands on the U.S. CPI report, which is expected to print a bit lower than its previous figure. Then, at 2:00 pm GMT we’ll see the TIC long-term purchases data. The report is expected to show a 63.4 billion USD demand for the dollar, higher than the 57.9 billion USD figure in August.

Coming in at 2:15 pm GMT is the country’s capacity utilization rate report, followed by the industrial production report around the same time. Both reports are slated to show slightly higher numbers than their previous readings, but make sure you stick around for any surprises, aight?

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Just like my soon-to-be-girlfriend J. Lo and Marc Anthony, bulls reunited with the dollar on the charts in yesterday’s trading. EUR/USD ended the day 54 pips below its opening price at 1.3476 while AUD/USD was down 89 pips at 1.0088 by the end of the day’s trading.

However, the dollar was still unable to post a win against the yen. Starting the day at at 77.10, USD/JPY closed at 77.00.

Once again, risk aversion swept through the markets and highlighted the dollar’s safe haven status. The big news yesterday was Fitch’s warning that the euro zone’s sovereign crisis could put U.S. banks at risk. Sure, it wasn’t really much of a surprise to hear the credit rating agency give out a warning, given that we see European bond yields soar up almost on a daily basis. However, it served as a wake-up call for investors, reminding them that the world would go down if Europe goes down.

Not even the mixed roster of economic reports from the U.S. kept investors from flocking in to the safety of the dollar.

It was reported yesterday that consumer prices declined by 0.1% in October and disappointed the market consensus which was for the CPI report to come in flat at 0.0%. However, excluding volatile items, the core CPI came in as expected, printing a 0.1% uptick. The report should have been bearish for the dollar as it would be one more reason for the Fed to provide the economy with more stimulus. But eh, investors seemed to have just shrugged it off.

On the bright side of things, we saw that demand for U.S. assets rose in September. The TIC Long-Term Purchases report printed a 68.6 billion USD surplus in foreign demand for assets, following the 58.0 billion USD reading we saw in August. It also topped forecasts as analysts only anticipated a more modest surplus of 63.4 billion USD.

The industrial production report for October also came in as a pleasant surprise, printing at 0.7% after having been predicted at 0.4%.

Lastly, the NAHB housing market index showed that the outlook for the housing market is getting better when it came in at 20 and beat the forecast which was for the index to match its previous reading of 17.

Our forex calendarlists a few top-tier economic reports from the U.S. today, so make sure you don’t miss them!

At 1:30 pm GMT , October’s building permits report is anticipated to come in at 600,000, while the number of initial jobless claims is seen at 396,000. Come 3:00 pm GMT, the Philly Fed Manufacturing index is eyed to match its previous reading of 8.7.

Also keep an ear out for news that could shift market sentiment. Remember, risk aversion usually sends the dollar on rallies. Good luck!

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The dollar was chillin’ like ice cream fillin’ yesterday as traders priced in concerns in the euro zone and positive economic reports from the U.S. EUR/USD only dipped by 10 pips to 1.3466, while USD/JPY slipped by a mere 5 pips to 76.96.

But don’t think that the dollar bulls and bears are calling in an early weekend! Yesterday FOMC member William Dudley relayed his concerns on the economy, saying that more bond-buying from the central bank might help spur economic recovery.

Good thing that the U.S. economic reports were able to limit the high-yielding assets’ selloff. Despite the onslaught of risk aversion in the euro region, the dollar remained steady against its major counterparts thanks in part to better-than-expected reports from the U.S.

The U.S. building permits clocked in at 650,000 in October, which is higher than September’s 590,000 reading. Even the housing starts showed a bit of optimism, coming in at 630,000 in October when analysts were expecting only 610,000. If you remember, the housing market is one of the Fed’s major concerns aside from the employment numbers.

The Philly Fed manufacturing index declined to a reading of 3.6 from its 8.7 figure in October, but most the report’s major indicators weren’t so bearish, so traders were still able to hold on to their good vibes.

Only the CB leading index report at 3:00 pm GMT today is scheduled for release from the U.S., so make sure you got your eyes on any news reports that might affect risk sentiment and the low-yielding dollar!